CVR Partners LP: 9%-Yielder Trading at Highest Levels Since 2022
July 1, 2025
CVR Partners Units Crushing S&P 500
Strong financial results, increased nitrogen fertilizer demand for corn, and investor speculation are all factors helping energize CVR Partners LP (NYSE:UAN) units. On June 23, UAN units hit a 52-week high of $90.49.
UAN has been on a tear recently. I only last profiled CVR Partners in early April, right after investors kicked it off a cliff. UAN units have taken an oversized hit, much like the broader market, on fears of what a global trade war could do to the economy.
This came in spite of the company posting strong fourth-quarter and year-end results and projected strong nitrogen fertilizer demand for 2025. We had a feeling that the 14% share market decline in early April was a little extreme. That’s why we looked at it a couple days later. After all, Income Investors is about high-yield dividends and opportunity.
It didn’t take long for knee-jerk-reaction investors to come to their senses. By late April, UAN had erased all of its losses and, thanks to strong first-quarter results, jumped even higher.
As of this writing, UAN is up:
- 21% over the last three months
- 24% year to date
- 32.5% year over year
- 29% since I last looked at it in early April
Chart courtesy of StockCharts.com
About CVR Partners LP
America’s only petroleum coke-based nitrogen fertilizer producer, CVR Partners LP, is a limited partnership formed by CVR Energy, Inc. (NYSE:CVI) to own, operate and grow its nitrogen fertilizer business. (Source: “Who We Are,” CVR Partners LP, last accessed June 19, 2025.)
CVR Partners’ nitrogen fertilizer manufacturing facilities, which are responsible for producing ammonia and urea ammonium nitrate (UAN) fertilizers, are located in Coffeyville, Kansas, and East Dubuque, Illinois.
Its Coffeyville plant is the only one in North America that uses the petroleum coke gasification process to make hydrogen, a key ingredient in its manufacturing process. The company’s East Dubuque nitrogen fertilizer plant uses natural gas as its feedstock to produce nitrogen fertilizer.
Fertilizer makers like CVR Partners take nitrogen out of the air and combine it with hydrogen, usually from natural gas, in order to make the nitrogen compound ammonia. Ammonia is either applied directly to the soil as a nitrogen fertilizer or used as a building block to make other nitrogen fertilizers. This includes urea, ammonium sulfate, and other water-based, liquid nitrogen fertilizers.
On the topic of farming, the demand for corn is high in the U.S., because, in addition to corn on the cob, the crop has a large number of uses, including feed grain and fuel (ethanol).
Strong Q1 Results
For the first quarter ended March 31, 2025, CVR Partners announced that net sales grew 12% to $143.0 million. (Source: “CVR Partners Reports First Quarter 2025 Results,” CVR Partners LP, February 18, 2025.)
The company’s operating income advanced 72.5% to $34.6 million. Net income came in at $27.0 million, or $2.56 per share, up 116% from $12.5 million, or $1.19 per share, in the same prior-year period. CVR Partners reported earnings before interest, taxes, depreciation, and amortization (EBITDA) growth of 35.2% to $53.0 million.
Commenting on the results, Mark Pytosh, the company’s chief executive officer, said, “CVR Partners posted strong operating results for the first quarter of 2025 driven by safe, reliable operations and a combined ammonia production rate of 101 percent.”
First-Quarter Distribution Upped 29% to $2.26/Unit
When it comes to distributions, CVR Partners LP’s policy is to distribute all of the available cash it generates each quarter. That means its payout will vary due to factors such as operating performance, fluctuations in the prices of finished products, and maintenance capital expenditures.
To that end, the partnership announced a first-quarter distribution of $2.26 per unit, up 29% on a sequential basis and 18% on an annual basis. This works out to $2.26 per share, or $7.10 per unit, for a forward yield of eight percent. (Source: “Dividend History,” CVR Partners LP, last accessed June 19, 2025.)
The Lowdown on CVR Partners LP
CVR Partners LP is the unsung hero of fertilizer. It has a strong balance sheet and is reporting very positive financial results. Looking ahead, management said that supply and demand balances for nitrogen fertilizer products remain tight and prices have continued to increase going into the spring planting season.
This positive outlook could help juice UAN units and distribution payouts over the longer term. And that’s good news for the 64 institutions that hold 47.4% of all outstanding shares. The three biggest holders are Carl Icahn, Morgan Stanley, and UBS Group AG. (Source: “CVR Partners, LP (UAN),” Yahoo! Finance, last accessed June 19, 2025.)
